| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 24, 2020, Invesco Mortgage Capital Inc., a Maryland corporation (the “Company”), sold the remaining shares of its common stock, par value $0.01 per share (the “Common Stock”), registered and available to be sold under its common stock at-the-market program, pursuant to the Company’s related prospectus supplement, dated March 19, 2019, and the accompanying base prospectus, dated February 27, 2019 (the “Base Prospectus”), forming part of the Company’s effective shelf registration statement on Form S-3ASR (File No. 333-229917) (as the same may be amended and/or supplemented, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”). Since September 30, 2020, the Company has issued 14,434,309 shares of Common Stock pursuant to this at-the-market equity program, generating gross proceeds of $49.2 million and, after deducting commissions and other costs, net proceeds of $48.5 million. The proceeds from these sales were contributed to the Company’s operating partnership and used to fund investment activities.
On November 30, 2020, the Company, IAS Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”), and Invesco Advisers, Inc., a Delaware corporation (the “Manager”), entered into an equity distribution agreement (the “Equity Distribution Agreement”) with JMP Securities LLC (the “Placement Agent”), pursuant to which the Company may sell up to 45,000,000 shares of Common Stock (the “Shares”), from time to time through the Placement Agent. The Shares are registered with the Securities and Exchange Commission (the “Commission”) pursuant to the Registration Statement. The Company has filed with the Commission a prospectus supplement, dated November 30, 2020, to the Base Prospectus included in the Registration Statement, in connection with the offer and sale of the Shares from time to time in the future.
Subject to the terms and conditions of the Equity Distribution Agreement, the Placement Agent will use its commercially reasonable efforts consistent with its sales and trading practices to solicit offers to purchase the Shares in accordance with instructions from the Company. Sales, if any, of the Shares made through the Placement Agent may be made by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale (which may be deemed to be “at the market” offerings as defined in Rule 415(a)(4) under the Securities Act) or negotiated transactions, or as otherwise agreed with the Placement Agent, including in block transactions or any other method permitted by law. The Placement Agent will be entitled to compensation of up to 2.00% of the gross proceeds from the sale of the Shares sold through the Placement Agent from time to time pursuant to the terms of the Equity Distribution Agreement.
The Company will continue to evaluate market conditions and issue Shares under the Equity Distribution Agreement as appropriate, and such issuances may be material. However, the Company is not obligated to sell, and the Placement Agent is not obligated to buy or sell, any Shares under the Equity Distribution Agreement. No assurance can be given that the Company will sell any Shares under the Equity Distribution Agreement, or, if it does, as to the price or number of Shares that it sells, or the dates when such sales will take place. The Company will report at least quarterly the number of Shares sold through JMP Securities LLC, as agent, under the equity distribution agreement, the net proceeds to us and the compensation paid by us to JMP Securities LLC in connection with the sales of common stock.
The Company, the Operating Partnership and the Manager made certain customary representations, warranties and covenants concerning the Company, the Operating Partnership, the Manager and the Registration Statement in the Equity Distribution Agreement and also agreed to indemnify the Sales Agent against certain liabilities, including liabilities under the Securities Act. The representations, warranties and covenants set forth in the Equity Distribution Agreement were made only for purposes of the Equity Distribution Agreement, and only as of the specified dates provided therein. The representations, warranties and covenants in the Equity Distribution Agreement were made solely for the benefit of the parties thereto, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties rather than establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Equity Distribution Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
A copy of the Equity Distribution Agreement is attached to this Current Report on Form 8-K (this “Report”) as Exhibit 1.1 and is incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibit 1.1.
